Time flies and here we are into August, almost two thirds of the year gone!
We remain as busy as ever, looking at all sorts of interesting investment opportunities and working on several deals, but keeping a very careful watch on recent events in the rental market.
You may have heard, but one of the most recent newsworthy items as it relatesto multi-family homes in particular, has been the extension of the eviction moratorium on apartment renters falling behind with their rental payments.
First imposed almost one year ago in September 2020 by the Center for Disease Control and Prevention (“CDC”), the moratorium was originally due to expire in June but was then extended to July 31st.
Yet, this last Tuesday, the CDC announced a further, albeit more limited, eviction moratorium lasting until early October 2021.
Without the protective federal eviction ban being extended by the Biden administration, it is reported that millions of renters would be at risk of losing their homes. Many such renters have applications pending to secure some of the $46 billion in federal emergency rent relief which has been set aside—but of which only a small fraction has so far been distributed.
There is now particular urgency to get this money to those who need it by October in order to keep tenants housed and to ensure landlords receive their due rent.
Who does the moratorium protect?
The new protection will be more focused than previously, targeting those areas with “high” or “substantial” transmission rates of coronavirus.
As at August 1st, more than 80% of US counties were classified as having such “substantial” or “high” levels of community transmission. The Biden administration has said those areas include 90% of renters.
Landlord groups may challenge the extension
Perhaps not surprisingly, many landlord’s groups are frustrated and maintain that rental home owners have lost billions of dollars which they will never recover.
These groups have expressed serious concern at the administration’s change of heart, and noted that CDC may not have the legal authority to extend the moratorium with Congress unable to pass the relevant legislation. In fact, the Supreme Court stated in June that any extension will need clear and specific congressional authorization.
Furthermore, in multiple lawsuits across the country, the New Civil Liberties Alliance (“NCLA”), an organization aiming to protect constitutional freedoms, is arguing that the eviction moratorium exceeds the constitutional and statutory limits of CDC’s authority.
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Whilst it’s unclear if the new action from the CDC can survive the courts, the Biden administration hopes that, at a minimum, by the time the matter gets litigated it will probably have gained some additional time to distribute ERA funds.
Certainly, interesting times ahead for landlords and tenants alike and something we have to watch closely in the coming months.
– Ava Benesocky
CEO, Co-Founder CPI Capital
– August Biniaz
Chief Strategy Officer, Co-Founder CPI Capital